Introduction: The Top 401k Plans for a Fantastic Retirement

Planning for retirement isn’t an easy thing to do, especially when you have a mortgage yet to be paid off, children heading off to college, and a host of other debts. A 401k plan is one of the most common retirement plans that people use to best prepare for their financial future. Unfortunately, most people don’t even understand a 401k plan definition.

Before you can choose the best 401k plans for you among the number of different types of 401K plans out there, you first need to understand what 401 k plans are and how a 401k retirement plan works.

Red Award Emblem for Best 401k Plans

Award Emblem: Top 6 Best 401K Plans

In this brief article, AdvisoryHQ will review six of the top individual 401k plans and overall best 401 k retirement plans. We will begin by offering a simple 401 k plan definition before sharing a comparative table of the top 401k plans out there.

In our FAQ section, we look at the different types of 401K plans available so that you and your family can choose the best type of 401k for your needs. We also look at what to look for in a 401k retirement account and how to choose the best type of 401k. Finally, we offer a complete review of the six best 401k plans out there.

See Also: Best Unsecured Credit Cards for Bad Credit | How to Find & Get Poor & Bad Credit Unsecured Credit Cards

What Is a 401k Plan and a 401k Plan Definition?

Before you can start planning for retirement, you need to understand a 401k plan definition. Since there are many different types of 401K plans, and each one has its own 401 k plan definition, you need to do your research before settling on the best 401k plan for you.

Below, you will find 401 k plan definitions as defined by different leading retirement and financial companies.

  • 401 k plan definition by Investopedia: “A 401(k) plan is a qualified employer-established plan to which eligible employees may make salary deferral (salary reduction) contributions on a post-tax and/or pretax basis.”
  • 401 k plan definition by Wikipedia: “In the United States, a 401(k) plan is the tax-qualified, defined-contribution pension account defined in subsection 401(k) of the Internal Revenue Code.Under the plan, retirement savings contributions are provided (and sometimes proportionately matched) by an employer, deducted from the employee’s paycheck before taxation (therefore tax-deferred until withdrawn after retirement or as otherwise permitted by applicable law), and limited to a maximum pre-tax annual contribution of $18,000 (as of 2015).”
  • 401 k plan definition by the Wall Street Journal: “A 401(k) is a retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes aren’t paid until the money is withdrawn from the account.”

AdvisoryHQ’s List of the Top 6 401k Plans

List is sorted alphabetically (click any of the 401k retirement plan names below to go directly to the detailed review section for that 401K plan):

Top 6 Best 401k Plans | Brief Comparison

401k Plans

Profit Sharing Mechanism

Total Plan Assets

Other Important Factors

Allergan Retirement Plan


1.4 billion

7,600 participants

Conoco Phillips Company Retirement Plan


6.9 billion

Stock bonus component

Gusto Retirement Plan



0.03% employee paid fee

Merrill Lynch Company Retirement Plan


8.9 billion

ESOP Component

Novartis Corporation Retirement Plan


7.3 billion

38,000 enrolled employees

Southwest Airlines Pilots Retirement Plan


3.2 billion

8,500 active participants

Table: Top 6 Best 401 k plans | Above list is sorted alphabetically

What Types of 401K Plans Exist?

There are a number of different types of 401K plans out there. Traditional 401k plans are the most common and allow employees to choose elective deferral contributions from their salary. This type of 401k allows you to choose how much to send toward your retirement plan. Additionally, employers can elect to add contributions to this 401k plan.

dollars - 401k Plans

Image Source: Pixabay

A self-directed 401k plan is another type of 401 k retirement plan that allows you to be your fund manager and choose what types of investments are best for you. This type of 401k is best for people who want more direct control of their investment options.

Furthermore, a safe harbor 401k plan makes employer contributions non-forfeitable. It is a sort of forced retirement plan. These types of 401K plans can’t exceed 5% of an employee’s salary and are good for people who otherwise would have difficulties sticking to a retirement savings plan.

Lastly, tiered profit sharing 401k plans are some of the best 401k plans for small businesses with less than 50 employees who want to use their 401 k retirement plan as a sort of incentive for best workers. With these 401k plans, employees are grouped into different classes according to the work they do.

According to SD Retirement Plans, with these best 401k plans, “[t]he owner apportions varying profit share for each group to reward them according to their contribution to company’s success. The plan benefits employees immensely as well as objectively manages the profit sharing cost.”

Don’t Miss: Grants for Single Mothers & Moms | Guide | Finding Top Grants for Moms

What to Look for in a 401k Retirement and How to Choose the Best Type of 401k

Unfortunately, many companies offering 401k plans simply don’t include the best and most important options to help you save toward retirement. Below, you will find a list of five different features that the companies offering the best 401 k retirement plan should offer.

  • Quality Company Contributions: The top companies offering the best 401k plans often profit sharing mechanisms or matching contributions. If your company is offering 401k plans with these features, chances are that you’ll see your retirement savings increase much faster.
  • Short Plan Eligibility Requirements: If you have to work for a certain company five to ten years before they start to contribute to your 401k plan, you’re definitely getting the short end of the stick. Since most people usually change employers several times during a lifetime, finding an employer that offers a 401k retirement package immediately upon hiring is important.
  • Low Fees: You definitely want 401k plans where large chunks of your employer’s contributions are being eaten up by heavy fees. As with almost any financial investment, a low fee 401k retirement package is a must.
  • High Employee Participation Rates: One of the best ways to gauge the quality of individual 401k plans is through the percent of employees enrolled. A sure sign of the best 401k plans is when employee participation nears 100%.
  • Salary Deferrals: Lastly, 401k plans that have high employee salary deferrals are also a sign of quality 401 k plans.

All-in-One Change Management Tools

Top Rated Toolkit for Change Managers.

Get Your Change Management Tool Today...

AdvisoryHQ’s Selection Methodology

What methodology does AdvisoryHQ use in selecting and finalizing the credit cards, financial products, firms, services, and products that are ranked on its various top rated lists?

Please click here “AdvisoryHQ’s Ranking Methodologies” for a detailed review of AdvisoryHQ’s selection methodologies for ranking top rated credit cards, financial accounts, firms, products, and services.

Detailed Review – Top Ranking 401k Plans

Below, please find the detailed review of each 401 k retirement plan. We have highlighted some of the factors that allowed these individual 401k plans to score so highly in our selection ranking.

Allergan Retirement Plan Review

The Allergan 401k plan is one of the best 401k plans offered by big companies. Among the best 401k plans, this plan is unique in that it has a profit sharing feature and over 7,600 active participants. Furthermore, this 401k plan also has some of the lowest fees out there.

Conoco Phillips Company Retirement Plan Review

The Conoco Phillips 401k retirement package is another of the top 401k plans out there. This plan offers profit sharing mechanisms and also a stock bonus component. If you want a retirement plan that offers you the ability to invest more of your retirement in potentially successful company stock, this may very well be the best option for you. Additionally, this 401k plan also has over 6.9 billion in plan assets.

Related: MyDivorcePapers Reviews: Is mydivorcepapers.com Right For You?

Gusto Retirement Plan Review

The Gusto retirement plan is different from the other 401k plans reviewed here. Gusto is a company that offers companies help with the management of the 401k plans that they offer to their employees.

If your company manages their 401k retirement plan portfolio through Gusto, you can be assured that you’ll be paying some of the lowest fees at only 0.03% with no additional advisory fees.

Merrill Lynch Company Retirement Plan Review

Among the top 401 k plans, the financial giant Merrill Lynch also offers a quality option. With this 401k plan, you will receive a defined contribution plan and an ESOP component. It ranks in the top 15% of 401 k plans for company generosity, which is an important feature to look for when considering which retirement plan is best for you.

Novartis Corporation Retirement Plan Review

The Novartis corporation also offers some of the best 401k plans to their employers. Their 401k plan includes a defined contribution plan, which makes it easy to save for retirement. Additionally, there is a profit sharing mechanism associated with this plan. Over 38,000 Novartis employees have chosen to invest in this plan.

Novartis Logo - 401 K Plan Definition

Image Source: Novartis Corporation

Popular Article: Best Financial Goals to Set This Year (Examples of Short & Long-Term Financial Goals)

Free Wealth & Finance Software - Get Yours Now ►

Southwest Airlines Pilots Retirement Plan Review

Lastly, if you are a pilot flying with Southwest Airlines, chances are that you are receiving one of the best 401k plans in the industry. This 401k retirement package includes profit sharing mechanisms and over 3.2 billion in total assets, showing a strong amount of trust of qualifying employees. You should look for companies that offer similar packages where a high total asset ranking demonstrates the level of employee conviction in the retirement fund.

401k Plan - Southwest Logo

Image Source: Brightscope Blog

Conclusion – Why Learning a 401 k Plan Definition Can Help You Better Prepare for Retirement

When it comes to best preparing for retirement, it’s important to look first for a 401 k plan definition that will help you understand your options. Once you find a good 401 k plan definition, you should look over the different types of 401K plans in order to identify the top individual 401k plans for you.

The best 401k plans can help you best plan for your retirement. Through a quality employee contribution 401k retirement plan, you can make the most out of years of working for a company. As we have seen in the six retirement plans reviewed above, including a profit sharing mechanism in the company-offered 401k plan is one of the main components of the best 401k plans out there.

Additionally, the top 401k plans should also have a high employee participation rate and a significant amount of plan assets. This will prove that the company-offered 401k plan is financially stable and beneficial in the long run.

Whether you are searching for your first job or considering switching employers, make sure to look over the different 401k plans that your company offers. The six 401k plans reviewed above are some of the best 401k plans being offered by companies today. The terms and conditions on these 401k plans can serve as a benchmark to help you determine if your company’s plan is on par with the nation’s best 401k plans. 

Read More: Biblical Finances | Complete Guide on Biblical Financial Planning & Budgeting

AdvisoryHQ (AHQ) Disclaimer:

Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.

Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.